What is the primary benefit of refinancing?

The primary benefit of refinancing encompasses multiple advantages, making the comprehensive answer of "all of the above" the most accurate. When you refinance a mortgage, you can indeed achieve a lower interest rate, which directly decreases your monthly payments and the total interest paid over the life of the loan.

Additionally, refinancing allows borrowers to shorten the loan term. By moving from a 30-year mortgage to a 15-year mortgage, for example, homeowners can build equity more quickly while also benefiting from lower interest costs, albeit with higher monthly payments.

Refinancing also provides an opportunity to convert from an adjustable-rate mortgage (ARM) to a fixed-rate mortgage. Homeowners may choose to lock in a fixed rate if they anticipate that interest rates will rise, providing greater stability in their monthly payments.

The breadth of benefits associated with refinancing—including lowering interest rates, shortening loan terms, and converting loan types—captures the primary motivations consumers have for undertaking this financial strategy, thus justifying the correct answer as "all of the above."